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What are Domestic Payments and How Do They Benefit Merchants?


When businesses send or receive payments, it matters whether the transaction takes place within the same country or currency region or whether it takes place cross-border . Domestic payments refer to payments sent or received in the same market. Business owners who want to expand their business domestically and want to provide customers with options to make payments need to have a local bank account.

This article particularly looks at domestic payment systems and what businesses need to know.

What are the domestic payment systems?

Domestic payments refer to making payments in the same country where the bank has issued a transaction card that could be either debit or credit. The card holder’s account is also registered in that country. As well as card payments, each country or currency area often has their own system to send and receive payments via bank transfer – in Europe this is SEPA and in the UK this is called Faster Payments

While making domestic payments, there’s no need for any foreign exchange due to the payments being made in the same currency.. Since there is no currency conversion, there is no extra charge attached to the transactions because the currency is the same. For consumer transactions, domestic payments often don’t carry any extra fees.

Easy to get started

Domestic payments are essential for any business looking to start out. Opening a bank account as a business owner wasn’t historically an easy process, often having to book a physical meeting with a bank manager to fill out an application by pen and paper. Now, many Neobanks have been able to make this process much easier by creating seamless digital onboarding and app based accounts.

Domestic payments and revenue

Customers like to have options. Having a domestic business account will allow you to send and receive payments via the local payments system, including those funds processed by an acquiring back for card payments.. This broadens the customer base as some customers might have credit cards, some might have debit cards, and some might have both of them. This also facilitates customers who do not carry a lot of cash with them. As the world moves towards a cashless society, efficiently managing payments domestically via a business bank account is essential.

Improves cash flow

Domestic payment systems are often much more efficient because they support instant settlement. Unlike international transactions that can sometimes take weeks to settle and offer little transparency on the expected delivery amount. When operating cross-border, it is often beneficial if you can access the domestic payment system in the countries you operate via a local bank or by a specialist provider to benefit from the improved efficiencies mentioned.


Domestic payment systems have several advantages for the merchants. It allows them to process payments without having to pay expensive fees. Secondly, there are no currency exchange fees attached because the currency is the same. Finally, it improves cash flow through instant settlements, which allows the businesses to carry out essential activities such as paying employees and restocking inventory more efficiently.

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